Nigeria Telecommunications giant, Etisalat have commenced plans to raise $500m in loans from local banks to expand its network this year.

Wael Ammar, commercial officer, Etisalat told reporters that the investments will enable the mobile phone carrier grow the market share of Etisalat Nigeria, which is 40 percent owned by its parent company, to 17 percent this year.

It aims to add four million subscribers to its existing 15 million this year, he said. 

The company currently has a mobile market share of 15 percent, behind MTN‘s 43 percent and Globacom’s 22 percent. Airtel, a subsidiary of India’s Bharti Airtel, has a 20 percent share.

Ammar also said he expected average revenues for voice traffic across the industry to continue to decline to around $5 per user over the next 3-5 years, from around $6-7 per user currently. ARPU (average revenue per user) was $10 per user in 2008, he said.

“We are investing $500m this year to expand our network and services to Nigerian consumers,” he said, adding that Etisalat aims to increase its existing 3,000 cell sites by an undisclosed number.

He added that Etisalat entered Nigeria’s fast growing market as a start-up operation with a $2 billion investment 7 years ago, facing more established rivals like South Africa’s MTN and Globacom, owned by Mike Adenuga, billionaire tycoon.

Ammar said Etisalat would be able to grow its subscriber base without having to poach large numbers of customers from rivals because some 40 percent of Nigerians - tens of millions of people - still did not own a phone.

“We see the second wave of growth coming from the youth segment. It is a huge segment that will ... turn into future consumers and the growth will happen across multiple years,” he said.

The number of mobile users in Nigeria crossed the 100 million subscriber base in the first half of last year, adding six million new callers from 2011.

The International Telecommunications Union forecasts Nigeria to have 120 million mobile subscribers by end 2013, out of a population of 170 million.